Exactly how little will rents fall with the housing benefit changes?

HAMISH_MCTAVISH

There has been a lot of speculation on this board about the impending change from the 50th percentile of rents to the 30th percentile of rents, and what that really means for landlord and tenant income.

The government has now published the facts.

http://www.voa.gov.uk/LHADirect/Documents/LHA_percentile_rates_Oct_2010.html


The average decrease in benefit claimant allowable rents nationally are:

1 Beds: -6.78%
2 Beds: -6.70%
3 Beds: -7.74%
4 Beds: -10.30%

However, this figure alone is only half of the story.

Claimants only make up a minority of private rentals. And most claimants will already be paying less than the 50th percentile maximum rent. Many will already be paying less than the proposed 30th percentile rents.

So other than the few thousand living in the most expensive areas, the average claimant will see only a tiny reduction in benefit.

And it is also likely that the landlord will not be inclined to reduce rents, or if they do, by a couple of percent at most, forcing the claimant to divert other spending towards rent to meet the shortfall.

Chances are, this move will result in absolutely no noticable impact to rents in the vast majority of the UK.

Graham_Devon

HAMISH_MCTAVISH wrote: »

So other than the few thousand living in the most expensive areas, the average claimant will see only a tiny reduction in benefit.

And that is exactly what people have been talking about.

Everyones already said it won't have much impact across the rest of the UK.

But thanks for a new thread on something thats been said over and over!

HAMISH_MCTAVISH

Graham_Devon wrote: »

And that is exactly what people have been talking about.

Why just the other day carolt claimed that 170,000 houses would be made empty by the benefits cuts.

And for the last few months, the majority of bearish posters on here seemed to think the benefits cuts would cause significant falls in the average rent, which would then feed into another house price crash as distressed landlords sold off their properties.

It now turns out that was all a load of absolute crap.

The cuts are tiny, and will impact only a small percentage of the private rental market.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Everyones The bulls already said it won't have much impact across the rest of the UK.
!

Fixed that for you.

chucky

HAMISH_MCTAVISH wrote: »

It now turns out that was all a load of absolute crap.

if it had fitted the blinkered tiny Devonian mindset you wouldn't have got the reply that you got.

your job on this thread has been done - good work hamish

Malcolm.

The Central London Housing Allowance is predicted to take a huge hit.

_____1 ROOM _1 BED __2 BED _3 BED ___4 BED ___ 5 BED
From £140.94 £350.00 £500.00 £750.00 £1,000.00 £2,000.00
To __£137.50 £250.00 £290.00 £340.00 _ £400.00 __£400.00

Helps explain why London's local authorites have been reserving rentals in cheaper areas.

olly300

HAMISH_MCTAVISH wrote: »

Why just the other day carolt claimed that 170,000 houses would be made empty by the benefits cuts.

Carolt was extrapolating the figures across all 33 London boroughs.

Forgetting that:
1. Some LLs don't charge the maximum they can.
2. Not everyone on HB rents and lives in zone 1
3. Some London boroughs i.e. Croydon and different parts of the same London borough are cheaper than others to rent in.

Loughton_Monkey

Malcolm. wrote: »

Helps explain why London's local authorites have been reserving rentals in cheaper areas.

Like Lahore, or Mumbai.

silvercar

Malcolm. wrote: »

The Central London Housing Allowance is predicted to take a huge hit.

_____1 ROOM _1 BED __2 BED _3 BED ___4 BED ___ 5 BED
From £140.94 £350.00 £500.00 £750.00 £1,000.00 £2,000.00
To __£137.50 £250.00 £290.00 £340.00 _ £400.00 __£400.00

Helps explain why London's local authorites have been reserving rentals in cheaper areas.

I thought they had been reserving B&Bs for those homeless?

I reckon they will provide 28 days emergency housing to the newly homeless, assess their qualification and decide that their homeless was intentional if it came about through rent arrears. That then means the LA has no obligation to rehouse and will leave them outside the boroughs in places like Luton.

vivatifosi

silvercar wrote: »

That then means the LA has no obligation to rehouse and will leave them outside the boroughs in places like Luton.

Ouch! That's cynical. Not you silvercar but the LA. I find it morally repugnant that one LA can cr&p all over the doorstep of another.

As I understand it is funding formulae do not adjust automatically and instead reflect history, so dump a bunch of deprived people on Luton and the funding for schools, doctors etc does not follow immediately. Hence London LAs wash their hands and transfer their problem to Luton's LAs, NHS doctors and hospitals, etc; or whatever other town is affected.

Of course, the big caveat is how much of this is real and how much is Labour scare tactics. However even the suggestion of playing pass the parcel with tenants is sick.

madeupname1

vivatifosi wrote: »

Hence London LAs wash their hands and transfer their problem to Luton's LAs, NHS doctors and hospitals, etc; or whatever other town is affected.

I don't get this. The idea that it isn't possible to get a two bed flat for £290 per week or a 3 bed house for £340 per week in London is scaremongering rubbish. Maybe not in Mayfair / Kensington, but the furthest people will have to move is ... god forbid ... zone 3 :rolleyes: